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This paper aims to study the effect of debt on economic growth of 19 developing countries over the period 1990-2011, through the use of a dynamic panel data model. The second part of this paper involves an empirical study of the effect that debt have on the contribution of investment to economic growth. The main statements issued from these two empirical tests stipulate a negative effect of the total external debt to GDP and external debt as a percentage of GNI ratio on economic growth and a negative interaction between these two debt’ measures and investment.

The external debt was an important stimulator of economic growth and a way to balance the budget. Moreover, public debt, especially foreign debt, has an independent existence outside the budget and public finances. So the debt is a universal phenomenon found in all countries. As a result, the inevitability of public debt is recognized accordingly. The loan is one of the main components of modern public finance. It is considered a temporary but complex resource. Indeed, this variable is closely related to the budget deficit. Economies that are at the initial stage of their development have a limited stock of capital and often offer more profitable investment opportunities than mature economies. What threatens by debt these countries? However, the accumulation of debt helped to finance many unprofitable, unrealistic and low efficiency projects that induced negative impact on growth. Indeed, the deterioration in the international economic environment of the eighty centuries (80) characterized by fluctuating exchange rates , the decline in commodity prices and rising interest rates, the debt of Africa become an obstacle to its development and full refund almost hypothetical.
It in this context that our research works whose main objective is to study the impact of external debt on economic growth in some developing countries. Thus, our problem looks as follows: What is the effect of the financing by external debt on economic growth? The methodology to answer this problem has led us to develop our work in two sections. The first is devoted to the empirical literature on the relationship between external debt and economic growth, while the second will focus on definitions’ variables, their sources and the interpretations of the results of the econometric study.The econometric investigation conducted as part of this research provides a dynamic range of 19 developing countries over the period 1999-2011.

Empirical studies show a correlation between external debt and economic growth are abundant. We will discuss in what follows some of them. Krugman (1988), Sachs (1989), Froot (1989) showed that the accumulation of debt and debt servicing are a tax on future production and discourages investment by crowding. In their work, Eichengreen and Portes (1986) were interested in identifying the determinants of the stock of debt of thirty countries at a given time (1955). Indeed, excessive debt and defaults tend to reduce the real rate of growth and the credibility of the state. Also, Claessens (1990), Warner (1992) and especially Borensztein (1990) identified the debt service as a determinant which influences negatively the external debt through econometric models on debt data of the Philippines, the outstanding and the ratio of debt service on exports have generally an inverse effect on private capital formation and encourage the country into debt.

Peace is good for business – entrepreneurship and violent conflict in Africa

By Tilman Brück, Wim Naudé and Philip Verwimp

Arms flows to sub-Saharan Africa (excluding South Africa) are small, at only 1.5 % of the total volume of global arms transfer according to the most recent figures from Stockholm International Peace Research Institute (SIPRI). Yet even small amounts of arms have a significant impact on stability and security in the region, which in turn has wide implications for development and entrepreneurship.

Still, the details of how violent conflict has an impact, especially on small businesses, are far from being understood. One reason is that any theoretical models naturally assume a state of peace. Another reason is that, within economics, there are still no suitable theories about the causes and consequences of conflict, which is compounded by the difficulty of collecting data in conflict-affected areas, the dominance of macro-level approaches in political science, and the disproportionate concern in the aid community on the impact of violent conflict on multinational enterprises.

The Need for Industrialization and Industrial Policy
Conflict is most often a characteristic, or defining feature of states that have been described as ‘fragile’ states. Fragile states are amongst the poorest, and lack authority, legitimacy and capacity to promote their citizens’ wellbeing – often due to violent conflict but also suffering from violent conflict. Given the widespread occurrence of violent conflicts in Africa, the rising concern about fragile states and their repercussions for global development, the lack of research on the emergence of, and challenges to entrepreneurship and small businesses during violent conflict is a significant lacuna.

Concepts and DefinitionsViolent Conflict
Violent conflict refers to the systematic use of violence by armed groups to reach political objectives. The word systematic is important as it indicates that we are focusing here on violent conflict that goes beyond its association with crime, although protracted civil conflicts are accompanied by the rise and spread of organized crime.

The 3rd Tana Forum to discuss the Impacts of Illicit Financial Flows on Peace and Security in Africa from April 26-27 , 2014, Bahir Dar, ETHIOPIA

The Third Tana High -Level Forum on Security in Africa will take place from April 26th – 27th 2014 in the historical city of Bahir Dar, Ethiopia.

This year’s Forum will focus on Illicit Financial Flows (IFFs) in and out of Africa and their impact on the continent’s security.

The impact of IFFs on Africa’s development is a priority issue for the African Union (AU) and its member states, as evidenced by the establishment of a High-Level Panel (HLP) of eminent persons headed by Former President Thabo Mbeki to address the issue. This year’s Tana Forum seeks to complement this initiative by focusing particularly on the peace and security dimensions.

In addition to this, the Forum will continue to serve as an opportunity for African leaders, policy makers and other stakeholders to learn from other countries’ experiences in understanding the impact, distinct characteristics and strategies for combating Illicit Financial Flows.

The Tana High-Level Forum on Security in Africa is a platform for African leaders, key stakeholders, and pro-active strategists to collaboratively engage in exploring and exchanging ideas on African-led solutions to security challenges. The Forum’s mission is to further open and vigorous debate on the nature and causes of Africa’s pressing security threats and, over time, to cultivate a distinctively African voice on how to understand and meet the chief peace and security challenges facing Africa.

The Maiden Tana High-Level Forum on Security in Africa, under the theme “Managing Diversity and State Fragility” took place from 14-15 April, 2012, in Bahir Dar, Ethiopia.

The agenda of the second annual Forum, held in April 2013, focused on the problem of organized crime in Africa, and had paid tribute to the Forum’s greatest champion, the late Prime Minister of Ethiopia, Meles Zenawi.

The Forum is an independent initiative of the Institute for Peace and Security Studies (IPSS) of Addis Ababa University and of eminent African personalities including the late Prime Minister Meles Zenawi.

Carlos Lopes at the Yale African Development Colloquium on Monday, said a new brand of Africa is emerging; “one that exudes confidence, attractiveness for investments and that has considerably lowered risk, with investment reaching US$50 billion in 2012.”

New Haven, USA, 14 April 2014 (ECA) – A decade after former UN Secretary-General Kofi Annan’s made his landmark ‘fork in the road’ speech to the General Assembly calling for the reform of the global body, the Executive Secretary of the Economic Commission for Africa, Carlos Lopes told the Yale African Development Colloquium, Monday that “the fork in the road for Africa, now points to one direction and one choice, which is the path to industrialization.”

He highlighted numerous developments in Africa that constitute a radical departure from what he described as “deep divisions and underperforming collective institutions that marked the UN member States in 2003.”

“The world is very different today than it was in 2003 and while Africa is now at a fork in the road, this metaphor needs to be contextualized to reflect the developments taking place on the continent today,” said Lopes, adding, “I do not see indecisiveness on the part of continent; on the contrary, there is heightened assertiveness.”

He said a new brand of Africa is emerging; “one that exudes confidence, attractiveness for investments and that has considerably lowered risk, with investment reaching US$50 billion in 2012.”

Yet, cautioned Lopes, Africa still needs to move from 5 to 6 % average growth to the magic 7% – the minimum required to double average incomes in a decade.

“There is still a long way to go as poverty remains high, access to social services weak and pervasive conflict undermines gains,” he said.

He told the gathering that if Africa’s aim is to become “a prosperous and integrated continent in peace with itself”, its negotiating stance has to be consistent with – and supportive of its transformative agenda, as envisioned for 2063.

He stressed that the Continent must innovate in the business of transformation and called for policy tools and economic enablers.

“The commonality between the investments in Prato, Guanajuato and Itú-São Paulo is that they have attracted the attention of Africa’s number one trading partner: China,” he said, adding: The lesson for Africa is that industrialization is a competitive business.

“The continent needs to find its own recipe, its own miracle recipe, if it wants to become one the factory floors of the world,” he stressed.

The Yale statement comes in the heels of the 2014 Economic Report on Africa, launched in New York over the weekend and in Abuja on 30th March. The Report urges Africa to build credible institutions to boost industrialization. As noted by Carlos Lopes during the launch, to succeed, “industrial policy has to be organic, it has to be contextualized, it has to be specifically African.”

Present at the Colloquium were: Mr. Ernesto Zedillo, Former President of Mexico, Donald Kaberuka, President of the African Development Bank, Ernest Aryeetey, Vice Chancellor, University of Ghana and Shanta Devarajan, Chief Economist of the Middle East and North Africa Region, The World Bank.

Andrew Dosunmu’s first Solo exhibition of his photography opens in New York City today. Hotel Particulier is pleased to present Andrew Dosunmu first Solo exhibition – a show of 10 photographs selected from over 10 years of photography, personal and commissioned work. Each large format photographs stand by itself, a bold tribute to the profound, intense and yet extremely stylish work. A dignified statement, homage to each truly individual and anonymous, and caught by Andrew Dosunmu with conscientiousness and momentum. Dare to catch me could be the rhythm of this poetical journey; real life and narrative where each character dare the photographer and us, the viewer to catch him or her before disappearance or escapism. With their masks, hood, sunglasses or mirror all real life accessories to twist the reality, and “play” the appearance, Andrew Dosunmu’s Heroes, like in his movies are beautiful in the light, and amazingly desirable.

Andrew Dosunmu currently lives and works in New York. Raised and educated in Nigeria, Dosunmu began his career as a design assistant at the fashion house of Yves Saint Laurent. He has subsequently worked as a creative director and fashion photographer whose images have appeared in a variety of international magazines. Besides a flourishing career in photography, Dosunmu is also active in film and television. His award-winning documentary Hot Irons (1999) showcases the artistry of some of Detroit’s finest African-American hairstylists as they prepare for the annual “Hair Wars” competition. In South Africa, Dosunmu has directed episodes of the widely acclaimed television series “Yizo, Yizo” which dramatizes the policy debates around education in post- apartheld South Africa through a frank presentation of the social crises and conflicts at a Johannesburg high school. Dosunmu has also served as creative director for album covers (for such artists as Erykah Badu and Public Enemy), and directed music videos, including his first for Issac Hayes in 1996 and others for Angie Stone, Common, Wyclef Jean, Kelis, Aaron Neville, Maxwell and Tracy Chapman. Dosunmu participated in the photography exhibition “Snap Judgements: New Positions in Contemporary Photography” at the International Center of Photography, curated by Okwui Enwezor, in 2006.

Sundance feature film lab fellows (screenwriting and directing labs). MOTHER OF GEORGE and awarded a 2006 Annenberg Fellowship and won the 2006 Maryland Filmmakers Fellowship, and was one of three USA finalists for the 2005 NHK/Sundance award.

Thought leadership is not a science. It is difficult to measure its effects on sales, but large organizations continue to develop it because it creates a context beyond products and sales. It helps organizations connect with customers and community, citizens and investors. Thought leadership contributes to good will and helps establish credibility and trust — but perhaps most importantly, thought leadership pushes an organization to look beyond itself internally and become better.

Just what is Thought Leadership?
At the basic level, thought leadership represents the highest form of marketing content. Thought leadership offers insights, guidance, advice, observations and inspiration. As much as those attributes define thought leadership, it is perhaps through negative examples, that it often proves difficult for sales minded organizations to connect it with a revenue outcome. Thought leadership, for the most part, does not promote a product or even a company. It is an idea, more than anything else that define, thought leadership. Thought leadership usually derives from internal values, beliefs or passions, even when it is executed through partnerships with academic institutions or other researchers. Thought leadership begins with good questions, interesting perspectives that can be researched and proven. The best thought leadership goes on to challenge its own assumptions and transparently share the results with the world.

Thought leadership as a marketing tool
An organization can choose to market itself in a number of ways. Most young companies, and many with single products, concentrate on product-focused marketing, choosing to share unique features and offering a value proposition for the product intended to entice potential customers. As a company matures, expands its product lines and market presence, it moves from simply positioning and selling products, to establishing a brand, and eventually the company. Upscaling marketing beyond product creates entity with which consumer or citizen can have a relationship. A brand or company it stands for a promise, represents a legal entity and acts as a proxy for a collection of people who work and manage the organization […]

Has recent Sub-Saharan African growth translated into improved living conditions for ordinary Africans?

By Andy McKay

High rates of African growth reported in many Sub-Saharan African countries raises concerns about living standards for ordinary African people, with many reporting shortages of food and healthcare. This article assesses changes in living conditions associated with these high levels of growth.

The African growth recovery
The world has woken up to what has been apparent to many of those who live or have been in Sub-Saharan Africa in the past 6-8 years or more: the very impressive recovery of economic growth over recent years. An estimate of the pattern of evolution of aggregate Sub-Saharan African GDP in constant dollar values since 1960 is summarised in Figure 1. This shows the well-known period of significant decline from the mid-1970s to the early to mid-1990s; but now the period of subsequent recovery of growth has almost lasted as long, and has taken Sub-Saharan Africa’s per capita aggregate GDP higher than it has ever been since Independence.

Because of the long timescale the chart may appear to suggest that the recovery since the mid-1990s has been modest. But the whole continent’s per capita GDP grew by more than 30% over the 15 year period since 1995, and this includes some large (and small) countries that have had negative growth over the period. Growth between 1995 and 2005 was still slower than in the first 15 years since 1960. But the rate of growth has been particularly fast since 2005, certainly exceeding that of the early post-independence period, even despite the world financial crisis in 2007-08.

But what is much less well known is how much this African growth has translated into better living conditions for ordinary African people. The comment is frequently made that Africans do not feel the benefits of improved economic performance “in their pocket”. If there is a concern that commodities have played an important role in this growth this may bring less benefit to ordinary people […]

There is an increasing international perception that Africa is standing now at a turning point. It has become one of the world’s top growth areas (5.6% per annum) thanks to the structural reforms being put in place and its demographic dividend for the next 40 years. After being seen as the lost continent for decades, the urbanization of Africa and the emergence of a huge urban consumer market will generate sustainable growth. For the first time, the highest returns are in the sectors delivering goods and services to Africans themselves. Although, Africa is still perceived as a high-risk destination for investors, experience and facts show positive returns and lower risks than those captured by the financial markets. Thus actors investing professionally in the continent see higher returns thanks to the misperception of risk which leads to above-average risk/return ratios. As a consequence, the emergence of the continent reflects in the over performance of all African asset classes for the last decade.

There is an increasing international perception that Africa is standing now at a turning point. It has become one of the world’s top growth areas (5.6% per annum) thanks to the structural reforms being put in place and its demographic dividend for the next 40 years. After being seen as the lost continent for decades, the urbanization of Africa and the emergence of a huge urban consumer market will generate sustainable growth. For the first time, the highest returns are in the sectors delivering goods and services to Africans themselves. Although, Africa is still perceived as a high-risk destination for investors, experience and facts show positive returns and lower risks than those captured by the financial markets. Thus actors investing professionally in the continent see higher returns thanks to the misperception of risk which leads to above-average risk/return ratios. As a consequence, the emergence of the continent reflects in the over performance of all African asset classes for the last decade.

Luxury, a new type of luxury, a new definition? The definition of luxury is changing, from one that alluded to expense and quality, to another that now includes sentimental, cultural, moral and ethical considerations. Africa, its resources, its science, its culture and craftmanship are relevant to this new discourse.

Traditional luxury goods were those high-quality goods that only elites could afford to purchase: Large diamonds, exotic furs, rare perfumes, expensive cars. Very often, the boundary between luxury and simply expensive became blurred: Around the world “old money” often ridiculed the “nouveau riche” for their poor taste. Often this poor taste consisted of purchasing ostentatiously expensive goods rather than real quality. Truly aristocratic families were often discreet with their wealth, quietly cultivating “good taste” and purchasing goods that perhaps were not obviously expensive, but which exhibited extraordinary craftsmanship. In today’s world, the term “bling” refers to flashy, expensive goods rather than authentic quality and craftsmanship.

The past fifty years have seen the traditional luxury brands, such as Luis Vuitton, scale up their production lines using mass production techniques. Thus while they may still be regarded as “luxury,” they are no longer in any sense elite. As hundreds of millions of people now have the wealth with which to purchase a $5,000 handbag, “luxury” brands are also now mass market brands. At the same time, the same mass production techniques that have been used to develop products for “luxury” brands are now used for other mass market brands. Thus, there is no longer a sharp boundary, with respect to quality, between “luxury,” on the one hand, and one of the better mass market brands. The past fifty years have also seen a growing movement towards the moral implications of our purchases. To some extent this movement arouse out of the counter-culture passions of the 1960s.